United States v. Joshua Gadd , 701 F. App'x 855 ( 2017 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-16296
Non-Argument Calendar
________________________
D.C. Docket No. 1:14-cr-00291-SCJ-JSA-8
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
JOSHUA GADD,
Defendant - Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(July 13, 2017)
Before HULL, JORDAN and ROSENBAUM, Circuit Judges.
PER CURIAM:
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After pleading guilty, Joshua Gadd appeals his 66-month sentence for one
count of conspiracy to distribute and dispense Oyxcodone, Oxycodone and
Acetaminophen, and Morphine, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(C)
and (b)2. On appeal, Gadd argues that the district court erred in applying a three-
level increase to Gadd’s offense level for his role as a manager or supervisor,
pursuant to U.S.S.G. § 3B1.1. Gadd also argues that the district court should have
applied a two-level “safety valve” reduction pursuant to U.S.S.G. § 2D1.1(b)(17)
and that his 66-month sentence, which is at the low end of his advisory guidelines
range of 63 to 78 months, was substantively unreasonable. Upon thorough review
of the record and the parties’ briefs, we affirm Gadd’s sentence.
I. FACTUAL BACKGROUND
A. Offense Conduct
In December 2012, the Drug Enforcement Administration (“DEA”) received
information that Dr. David Battista was running a suspected “pill mill” in Atlanta,
Georgia and was distributing prescription drugs for no legitimate medical purpose.
Following a subsequent DEA investigation into Dr. Battista’s clinical practice, the
DEA discovered a new “pill mill” had opened at 3149 East Shadowlawn Avenue in
Atlanta, managed by Anthony Licata.
The DEA investigated the clinic at 3149 East Shadowlawn Avenue,
conducting visual surveillance and using undercover officers. Through their
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investigation, the DEA learned that Licata, along with clinic manager Charlyn
Carter, Dr. Romie Roland, and security guard Adrian Singletary offered controlled
substances to customers without a legitimate medical reason in exchange for
significant proceeds from the customers.
The DEA obtained court-authorized wiretaps of Licata’s phone and began
intercepting Licata’s phone calls. Through the interceptions, the DEA learned of at
least four calls between defendant Gadd and Licata, placed from December 16,
2013 to January 24, 2014. In these calls, Gadd would tell Licata that he was on the
way to the clinic with recruited patients. Licata would respond by offering Gadd
commissions as compensation for his “recruitment” of patients.
Additional DEA investigation revealed that Gadd, along with three other
codefendants, worked as sponsors for Licata’s “pill mill” drug distribution scheme.
Gadd and the three codefendants would arrange for patients to visit the clinic and
would occasionally pay for the patients’ visits. Gadd and the three codefendants
received kickback or commission payments from Licata of $50 to $100 for each
new patient they had brought in. Surveillance of Gadd showed that he brought in at
least ten recruits to the clinic. On at least one occasion, Gadd offered Licata $100
worth of cocaine as partial payment for the clinic visits of his recruits.
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B. Gadd’s Arrest
On August 6, 2014, a federal grand jury returned an indictment as to various
members of the Licata “pill mill” operation, including Gadd. The indictment
charged Gadd with one count of conspiracy to distribute and dispense Oyxcodone,
Oxycodone and Acetaminophen, and Morphine, in violation of 21 U.S.C.
§§ 841(a)(1), (b)(1)(C) and (b)(2). In conjunction with the indictment, an arrest
warrant for Gadd was issued. A search warrant did not accompany the arrest
warrant.
At 6:00 a.m. on August 7, 2014, police officers arrested Gadd at his
residence in Atlanta. The arresting officers knocked on the door of Gadd’s
residence and announced their presence, but Gadd did not immediately respond.
After waiting a short period,1 the arresting officers announced a second time and
again heard no response. The arresting officers then entered Gadd’s residence and
arrested him. After Gadd was arrested and placed in handcuffs, several officers
performed a security sweep of the room and discovered four cell phones, which
they seized.2 Following seizure of the cell phones, the government examined the
phones’ contents and found a recorded conversation between Gadd and Meghan
1
The officers’ testimony characterized the wait time between the first knock and
announce and the officers’ entry as being anywhere from 10 seconds to 45 seconds.
2
Arresting-officer testimony characterized the cell phones as being on the bed “in plain
view” at the time of the security sweep. Gadd testified that the cell phones were hidden from
view under pillows at that time.
4
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Cavanaugh, a prospective patient for the Licata “pill mill” who ultimately declined
to join.
C. Procedural History
On October 29, 2014, Gadd filed a motion to suppress the evidence
recovered from the four seized cell phones, arguing that any cell phone evidence
was the product of an illegal search. The magistrate judge held an evidentiary
hearing on the motion and recommended that Gadd’s motion to suppress be
denied. However, on May 20, 2016, before the district court ruled on Gadd’s
motion to suppress, Gadd entered a guilty plea to the charged offense.
D. Presentence Report
Following Gadd’s guilty plea, the probation officer prepared a presentence
investigation report (“PSR”). The PSR determined Gadd to be responsible for
767.418 kilograms of marijuana equivalent through his participation in the Licata
drug conspiracy. The PSR calculated a base offense level of 28 because the offense
involved between 700 and 1,000 kilograms of marijuana equivalent, pursuant to
U.S.S.G. § 2D1.1(c)(6).
The PSR also calculated a three-level increase for Gadd’s role as a manager
or supervisor in the conspiracy pursuant to § 3B1.1(b). The PSR stated that, though
Gadd was not the owner of the clinic, he was part of a group of “sponsors” who
“financed and profited from sending recruited patients through the clinic.” The
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PSR stated that the sponsors, including Gadd, gave patients transportation, paid for
their lodging and clinic appointments, and filled their prescriptions. In return, the
sponsors received kickbacks or commissions from Licata for each new patient
introduced to the clinic. Additionally, the patients themselves sometimes offered
the sponsors pills from their filled prescriptions as a reward for facilitating the drug
transaction.
The PSR determined that Gadd was entitled to a two-level reduction
pursuant to § 3E1.1(a) for acceptance of responsibility, bringing his total offense
level to 29. With a criminal history category of I, Gadd’s advisory guidelines range
was 87 to 108 months’ imprisonment. 3 See U.S.S.G. § 5 Pt. A.
E. Gadd’s Sentencing Memorandum
On September 9, 2016, Gadd filed a sentencing memorandum, objecting to
certain facts recounted in the PSR. Gadd first argued that the government failed to
sufficiently show that Gadd was responsible for more than 700 kilograms of
marijuana equivalent. Gadd argued that the government’s proposed quantity was
based in part on unreliable hearsay.
3
The page that summarizes the court’s sentencing options in the PSR states that Gadd’s
calculated total offense level was 31 and gives the corresponding higher advisory guidelines
range. However, based on the detailed calculations earlier in the PSI, Gadd’s adjusted total
offense level was 29, resulting in the advisory guidelines range of 87 to 108 months’
imprisonment.
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Gadd also argued that the three-level role increase under § 3B1.1(b) was
improper because he did not control, direct, or manage the “pill mill” operation.
Gadd asserted that, unlike the other sponsors, he was “a broke drug addict” who
was working for a small commission. Gadd contended that he did not provide
people transportation to the clinic, put people up in hotels, pay for prescriptions to
be filled, or routinely finance office visits.
Gadd argued that he should additionally receive a two-level “safety valve”
reduction pursuant to §2D1.1(b)(17) because he was a minor player compared to
the other indicted defendants. Gadd contended that his lack of criminal history and
his offering of a truthful statement to the government supported the application of
this reduction.
F. Sentencing Hearing
On September 13, 2016, the district court held a sentencing hearing. At the
beginning of the hearing, the district court adopted the facts in the PSR, to which
Gadd had not objected. The district court then addressed the three objections
outlined in Gadd’s sentencing memorandum: (1) Gadd’s base offense level; (2) his
three-level increase as a manager; and (3) the “safety valve” two-level reduction.
As to Gadd’s base offense level, the district court held a colloquy with
defense and government counsel, as well as the probation officer, concerning the
quantity of drugs attributable to Gadd’s involvement in the conspiracy. The district
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court heard argument from defense counsel as to why certain drug labels
overstated the amount of active ingredients attributable to Gadd, along with
arguments that certain drug purchases could not be linked to Gadd and that Gadd
consumed some of the drugs in question for legitimate pain-related needs.
Following this discussion, the district court determined Gadd to be responsible for
approximately 640 kilograms of marijuana equivalent and lowered Gadd’s base
offense level from 28 to 26.
As to the three-level managerial or supervisory increase, the district court
reviewed Gadd’s role in bringing patients to the clinic, heard argument from both
parties on the issue, and ultimately denied Gadd’s objection. The district court
found that “Mr. Gadd’s recruitment and . . . the nature of participation in the
commission of the offense would make this a proper role enhancement.”
The district court also denied Gadd’s request for the two-level “safety valve”
reduction as “moot” because a “safety valve” reduction cannot be applied to
someone who plays a managerial or supervisory role in a conspiracy as a matter of
law. However, the district court granted Gadd a two-level reduction for acceptance
of responsibility.
Having considered Gadd’s guidelines arguments, the district court calculated
a total offense level of 27 and a criminal history category of I, resulting in a revised
advisory guidelines range of 70 to 87 months’ imprisonment.
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The district court then heard argument concerning the 18 U.S.C. § 3553(a)
factors. Gadd’s counsel requested a downward variance to 24 months’
imprisonment based on Gadd’s abusive childhood, the death of several of Gadd’s
close family members including his wife, and Gadd’s drug addiction following a
back injury. Gadd’s counsel described Gadd’s post-arrest rehabilitative work,
including his participation in group therapy sessions and his learning a trade.
Gadd’s counsel also argued that a codefendant in the same drug conspiracy had
received a sentence of only 56 months’ imprisonment despite having an advisory
guidelines range of 97 to 121 months’ imprisonment.
The government, for its part, also requested a downward variance, but it
asked that Gadd’s sentence be reduced to only 66 months’ imprisonment due to
Gadd’s early involvement in the conspiracy and active recruitment of patients to
the clinics. The government also argued that the 56-month sentence of Gadd’s
codefendant was not relevant because that codefendant pled guilty earlier in his
respective case.
Following the parties’ arguments and a review of the § 3553(a) factors, the
district court granted in part Gadd’s request for a variance and reduced Gadd’s
total offense level from 27 to 26, which, with Gadd’s criminal history category of
I, established a new advisory guidelines range of 63 to 78 months’ imprisonment.
The district court then sentenced Gadd to 66 months’ imprisonment. The district
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court acknowledged that Gadd may be addicted to drugs, but it explained that
Gadd was “not . . . sitting here today . . . just because [he was] taking these pills.”
The district court stated that Gadd’s sentence was based on the fact that he
“recruit[ed] other people to come in and take these pills” and “ma[d]e them suffer
just like [Gadd] ha[d] suffered.” The district court noted that it also took “into
consideration” the codefendant’s 56-month sentence but did not find that this fact
merited a revised sentence.
On September 23, 2016, Gadd timely appealed.
II. GUIDELINES CALCULATIONS
A. Managerial or Supervisory Increase
The district court did not clearly err in applying a three-level managerial
increase to Gadd’s offense level pursuant to § 3B1.1(b).4 The Guidelines call for
the three-level increase if “the defendant was a manager or supervisor (but not an
organizer or leader)” in a criminal activity that involved five or more participants
or was otherwise extensive. U.S.S.G. § 3B1.1(b). According to the commentary, in
determining the level of the defendant’s participation in the criminal activity, the
court should consider factors such as “the exercise of decision making authority,
4
We review for clear error the district court’s application of an aggravating role increase
under U.S.S.G. § 3B1.1. See United States v. Zitron, 810 F.3d 1253, 1261 (11th Cir. 2016);
United States v. Ramirez, 426 F.3d 1344, 1355 (11th Cir. 2005); United States v. Jiminez, 224
F.3d 1243, 1250-51 (11th Cir. 2000). Under clear error review, “[a]s long as the district court’s
findings are plausible, we may not reverse the district court even if we would have decided the
case differently.” United States v. McPhee, 336 F.3d 1269, 1275 (11th Cir. 2003) (quoting
United States v. Engelhard Corp., 126 F.3d 1302, 1305 (11th Cir. 1997)).
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the nature of participation in the commission of the offense, the recruitment of
accomplices, [and] the claimed right to a larger share of the fruits of the crime.” Id.
§ 3B1.1 cmt. n.4 (emphasis added). This Court has held that a defendant acted in a
managerial or supervisory role by recruiting others to join or otherwise participate
in a conspiracy. See United States v. Bergman, 852 F.3d 1046, 1072 (11th Cir.
2017) (holding that a patient recruiter in a Medicare fraud case was a manager or
supervisor); see also United States v. Sosa, 777 F.3d 1279, 1301 (11th Cir. 2015).
Gadd does not dispute that he was responsible for recruiting numerous
patients to Licata’s clinic to help them obtain narcotics prescriptions for no
legitimate medical purpose. Although Gadd did not own or operate the clinic in
question, “the defendant need only manage or supervise one other participant in the
criminal activity” for the increase to apply. Id. It is well settled that recruitment of
others into a criminal activity is managerial or supervisory activity for purposes of
the increase. See United States v. Mandhai, 375 F.3d 1243, 1248 (11th Cir. 2004)
(“[Defendant] recruited [co-conspirator] into the plot, prompted him to purchase
weapons, and briefed him . . . . Nothing more was required.”). Given Gadd’s
recruitment of numerous “patients” in exchange for kickbacks or commissions
from Licata and occasional compensatory pills from the “patients” themselves, the
district court did not clearly err in applying the three-level increase.
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B. “Safety Valve” Reduction
The district court also did not err in denying Gadd’s request for the two-level
“safety valve” reduction.5 Section 2D1.1(b)(17) of the Guidelines provides that a
defendant may receive the two-level reduction if he meets the “safety valve”
criteria set forth in § 5C1.2(a). See U.S.S.G. § 2D1.1(b)(17). The defendant has the
burden of proving that he meets all of the criteria. See United States v. Cruz, 106
F.3d 1553, 1557 (11th Cir. 1997). Among those criteria is the requirement that the
defendant not be “an organizer, leader, manager, or supervisor of others in the
offense, as determined under the sentencing guidelines.” U.S.S.G. § 5C1.2(a)(4).
On this record, the district court did not clearly err in denying Gadd the
“safety valve” reduction. Because the district court did not clearly err in finding
that Gadd played a managerial or supervisory role in the drug conspiracy, and
because such a managerial or supervisory role precludes application of the “safety
valve” reduction as a matter of course, Gadd fails to satisfy his burden entitling
him to relief. See U.S.S.G. § 5C1.2(a)(4); Cruz, 106 F.3d at 1557.
III. SUBSTANTIVE REASONABLENESS
Gadd also has not shown that his sentence is substantively unreasonable.
We review the reasonableness of a sentence for an abuse of discretion using a two-
5
“When reviewing the denial of safety-valve relief, we review for clear error [the] district
court’s factual determinations.” United States v. Johnson, 375 F.3d 1300, 1301 (11th Cir. 2004)
(per curiam).
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step process. United States v. Pugh, 515 F.3d 1179, 1190 (11th Cir. 2008). We
look first at whether the district court committed any significant procedural error
and then at whether the sentence is substantively unreasonable in light of the
§ 3553(a) factors and the totality of the circumstances. Id.6 The party challenging
the sentence bears the burden of proving that it is unreasonable. Id. at 1189. We
will reverse only if we are “left with the definite and firm conviction that the
district court committed a clear error of judgment in weighing the § 3553(a) factors
by arriving at a sentence that lies outside the range of reasonable sentences dictated
by the facts of the case.” Id. at 1191 (quoting United States v. McBride, 511 F.3d
1293, 1297-98 (11th Cir. 2007)). 7
Here, the district court listened to Gadd’s arguments for a downward
variance, including his lack of a criminal history, his family situation, and his back
injury. The district court also considered the fact that Gadd had undertaken
rehabilitative work following his arrest, such as teaching himself a trade.
6
Apart from the two guidelines calculations discussed above, Gadd does not raise any
other procedural error and argues only that his sentence is substantively unreasonable.
7
The § 3553(a) factors include: (1) the nature and circumstances of the offense and the
history and characteristics of the defendant; (2) the need to reflect the seriousness of the offense,
to promote respect for the law, and to provide just punishment for the offense; (3) the need for
deterrence; (4) the need to protect the public; (5) the need to provide the defendant with needed
educational or vocational training or medical care; (6) the kinds of sentences available; (7) the
Sentencing Guidelines range; (8) pertinent policy statements of the Sentencing Commission;
(9) the need to avoid unwarranted sentencing disparities; and (10) the need to provide restitution
to victims. 18 U.S.C. § 3553(a).
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The district court then explicitly considered the § 3553(a) factors and
determined that the need for deterrence and the seriousness of the offense
outweighed the remaining factors. The district court recognized Gadd’s possible
addiction and how his actions have “had a negative effect on [Gadd’s] own life” as
well as “on [Gadd’s] family’s life.” However, the district court noted that Gadd
“would not be sitting here today if it was just because [he] was taking these pills.”
Rather, Gadd’s recruitment of patients “caus[ed] other people to go right down that
same path.”
The district court accordingly denied Gadd’s request for a more significant
downward variance and imposed a 66-month sentence, at the low end of a revised
guidelines range of 63 to 78 months’ imprisonment. The district court stated that it
imposed the sentence “based on the amount that [Gadd was] held responsible for
and [his] participation in recruitment in this matter.”
Gadd has not met his burden to show that his sentence was substantively
unreasonable. First, Gadd’s 66-month sentence is less than half the statutory
maximum for his charged offense and is within his revised guidelines range, both
indicators of reasonableness. See 21 U.S.C. § 841(b)(1)(C); United States v.
McKinley, 732 F.3d 1291, 1299 (11th Cir. 2013); United States v. Gonzalez, 550
F.3d 1319, 1324 (11th Cir. 2008); United States v. Hunt, 526 F.3d 739, 746 (11th
Cir. 2008).
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The district court’s determination that a greater downward variance was not
warranted because of Gadd’s managerial or supervisory role in the offense is also
supported by the record. Gadd held numerous conversations with Licata, a
principal conspirator, and Gadd brought new patient-recruits to Licata’s clinic on
multiple occasions throughout 2013 and 2014. Gadd received kickbacks from the
illegal distribution of the narcotics and provided partial payments to Licata as
advance payments for his recruits.
Although Gadd argues that the district court did not adequately consider the
comparative 56-month sentence awarded to a codefendant, the district court did in
fact consider the issue and noted the codefendant’s additional mitigating
circumstance of having pled guilty earlier in the investigation. Under these
circumstances, we cannot say the district court abused its discretion in refusing to
grant Gadd’s request for a more significant downward variance.8
IV. CONCLUSION
For all of the above reasons, we affirm Gadd’s 66-month sentence.
AFFIRMED.
8
We need not, and do not, address Gadd’s additional argument that certain evidence from
his cell phone was the product of an illegal search. Gadd acknowledges in his brief that seized
evidence, even if seized illegally, is generally admissible at a sentencing hearing. United States
v. Lynch, 934 F.2d 1226, 1236 (11th Cir. 1991). Gadd otherwise presents no particularized
challenge to the reliability of the evidence in question.
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